I don't care who you are, that's funny right there. - Larry the Cable Guy
The meme stock people are all-in on ARM as artificial intelligence. while somewhat jaded (realistic) old pros are mockingly referring to it as AI.
Us? On February 13 it was:
Chips: "Arm bigger than all but two FTSE 100 companies after shares rocket" (ARM)
It is the crown jewel of BritTech but it's not (yet) an AI play.
Preceded by "Chips: "Arm stock soars 35% as chip maker sees ‘signs of recovery’ in its market, raises guidance for the year" (Quick, Hire a Kid)" on February 7:
There's an interesting dichotomy developing in the markets, one that we've seen before.
The old pros are cautious, befuddled and a bit scared. Folks with less than a decade at the market are making money.
And the headline story from Yahoo Finance, February 14:
Those waiting for the artificial intelligence bubble to pop have been let down this earnings season.
In the latest sign that AI exuberance is alive and well in markets, Arm Holdings (ARM) stock has surged more than 70% in the last five days of trading after topping Wall Street's earnings estimates on Feb. 7.
And, perhaps most importantly, the chipmaker attributed its better-than-expected revenue forecast to artificial intelligence.
"When you think about artificial general intelligence, that's going to drive the need for more compute in a way that we've never seen before," Arm CEO Rene Haas told investors on the company's earnings call. "So as good as the last couple of quarters were, we're just at the beginning."
Arm soared nearly 50% in the next day of trading.
Shares at one point doubled from their pre-earnings price before a hotter-than-expected inflation report tempered the recent risk-on narrative in markets. Amid a broader market sell-off, Arm shares tumbled nearly 20% on Tuesday.
And while investors are buying the potential benefits, Wall Street is a bit more cautious on how the disruptive technology fully contributes to earnings growth for Arm moving forward.
Needham & Company analyst Charles Shi told Yahoo Finance Live that the firm isn't even sure Arm is that much of an AI play, with its current exposure to generative AI "quite small."
"It remains to be seen whether they can actually benefit from generative AI going into the future," Shi said.
This has become a prevailing theme among other popular AI trades like C3.ai (AI) and Palantir (PLTR). Wall Street wants to see further actual results and investors just want to hear more AI mentions....
....MUCH MORE
After yesterday's $28.99 whack the stock is up again today +$6.60 (+5.50%) at $126.58.
And AI stocks? In 2020 we posted this introduction to:
Investor's Business Daily on Artificial Intelligence Stocks
There is a definitional problem with the term "AI stocks [or companies]" in that AI is a tool. Much as the (over) hyped nanotechnology revolution didn't produce "nanotech stocks" but instead became incorporated into processes and procedures that give companies employing same an incremental edge rather than epochal shifts.*
However, if there is an AI "company" Nvidia would deserve the moniker as much as anyone....
